HSBC “resilient” as bad debt provisions increase
by Gill Montia
Story link: HSBC “resilient” as bad debt provisions increase
HSBC has reported a “resilient” start to 2009, although bad debt provisions rose during the three months to the end of March.
While the amount set aside showed an increase on the same period of 2008, it was less than the provision made in the final quarter of last year.
In addition, underlying profit rose during the first quarter of 2009 compared to a year ago, “assisted” by substantial valuation gains on the group’s own debt.
With these gains excluded, pre-tax profit was lower than a year earlier, but nevertheless significantly higher than in the final quarter of 2008.
The bank said its balance sheet had benefited from strong growth in its global banking and markets business and confirmed that it had written down $24.9 billion during 2008.
Details of writedowns for 2009 were not revealed but they are apparently being driven by “continuing weakness in the US” where the group’s consumer finance business “is now substantially in run-off”.
Asia remains the strongest trading region and “at the heart” of HSBC’s operating profitability; the group says it expects to complete its acquisition of a controlling stake in Bank Ekonomi of Indonesia in the second quarter of this year.
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